Notional interest on purchaser advances excluded from assessable value absent proof of nexus to any price reduction.

Notional interest on advances from purchasers was held not includible in the assessable value of manufactured goods unless the department proved a direct nexus between the advances and any reduction in sale price. The fact that the goods were tailor-made did not relax that burden or permit inclusion on a presumed benefit from reduced borrowing costs. The analysis reiterated that evidentiary difficulty in comparing tailor-made goods does not shift the onus away from the department, and the earlier decision on the same principle governed the issue. In the absence of credible proof of nexus, the proposed addition failed.

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Issues: Whether notional interest on advances received from purchasers was includible in the assessable value of the goods, and whether the department had established a nexus between the advances and any reduction in sale price.

Analysis: The appeals concerned advances taken against the price of manufactured goods. The department sought to add notional interest on such advances to the assessable value on the theory that the advances reduced borrowing and interest liability. The decisive question was whether the advances had in fact influenced or reduced the price of the goods. The fact that the goods were tailor-made did not relieve the department of its obligation to prove nexus by credible material. The reasoning followed the settled view that difficulty in comparison, especially in tailor-made goods, does not shift the burden away from the department. The earlier decision on the same principle was noted as governing the issue.

Conclusion: Notional interest on the advances was not includible in the assessable value in the absence of proof of nexus, and the appeals succeeded.

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